J. P. Morgan helped end the Panic of 1907 by organizing emergency support for banks.
During the panic, depositors withdrew money and trust companies faced runs after a failed attempt to corner the stock of United Copper. J. P. Morgan, already one of the country’s most powerful financiers, gathered bankers in New York and used private funds and negotiations to stabilize vulnerable institutions.
Morgan’s intervention included arranging loans, examining bank assets and helping secure a rescue for the Knickerbocker Trust Company’s deposits. The crisis eventually eased after the Treasury and private financiers supplied liquidity and confidence returned.
The panic demonstrated that the United States lacked a central bank capable of acting as a lender of last resort. Congress subsequently created the National Monetary Commission, and the Federal Reserve System was established in 1913. Morgan did not single-handedly solve every problem, but his coordination was central to the immediate response.